Lodge Limited
has a balance sheet date of 31 December 2020. The financial statements of the
company were authorised for issue on 31 March 2021. On 24 March 2021, some
inventory of Lodge Limited was destroyed by fire. The total value of the
inventory lost, which was uninsured, was $36,000 and part of the inventory
$10,000 was included in the closing stock in the balance sheet as at 31
December 2020. The destruction of inventory by fire on 24 March 2021 is:

Question

Answer

A non-adjusting event requiring note disclosure.

Answer

An adjusting event requiring the following journal entries: Dr Accounts Payable $10,000 Cr. Inventory/ Purchases $10,000

Answer

A non-adjusting event requiring the following journal entries: Dr Inventory/ Purchases $36,000 Cr. Accounts Payable $36,000

Answer

An adjusting event requiring the following journal entries: Dr Inventory/ Purchases $26,000 Cr. Accounts Payable $26,000

Crowdly

Lodge Limited has a balance sheet date of 31 December 2020. The financial state...

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